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Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net...

Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net income (exclusive of any investment income) of $616,000. Primus has 50,000 shares of common stock outstanding. Sonston reports net income of $216,000 for the period with 40,000 shares of common stock outstanding. Sonston also has 5,000 stock warrants outstanding that allow the holder to acquire shares at $11.00 per share. The value of this stock was $22 per share throughout the year. Primus owns 2,500 of these warrants.

What amount should Primus report for diluted earnings per share?

Diluted earnings per share
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Answer #1

The amount Primus should report as its Diluted EPS = $16.51

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